Argument: Carbon tax creates funds to support environmentally-friendly policies

Issue Report: Cap-and-trade versus carbon tax


The Economist, “Doffing the cap”, 6/14/07 – “A third advantage of carbon taxes is that they raise revenue. Governments can use this cash to reduce other inefficient taxes, thereby cutting the economic costs of carbon abatement. Or they can use the money to compensate those, such as the poor, who are hit disproportionately hard by higher fuel costs.”